In the case of Apple, ASI purchased finished Apple goods manufactured in China and immediately resold them to ADI or Apple Singapore which, in turn, sold the goods around the world. ASI did not conduct any of the manufacturing – and added nothing – in Ireland to the finished Apple products it bought, yet booked a substantial profit in Ireland when it resold those products to related parties such as ADI or Apple Singapore

But how much tax does Apple actually avoid when it does this? A lot, it turns out.

In 2012, Apple's "foreign base sales income" was about $25 billion, according to the Senate report, and it avoided paying $9 billion in taxes on that income:

U.S. Senate

Apple wasn't even reporting its U.S. taxes accurately, either, the Senate subcommittee found. Its annual report disclosed it paid much higher U.S. taxes than it actually paid to the IRS (see page 39). To investors, Apple said it paid $6.9 billion in U.S. taxes in 2011. But it actually only paid the IRS $2.5 billion, according to its tax return.